Roundup: Markets on 6 October

There was good news in Tokyo this morning: the Nikkei was up six per cent on expectations that the Japanese government had indeed been shamed into finding a way to increase the capital of the banks, with bills before the Diet (see Japanese banking collapse threatens IT sector). In London, the FTSE was up four per cent on hopes of an interest rate cut on Thursday, and opened this morning in buoyant mood. The Dow was marginally up (0.2 per cent, or 17 points) at the close of play yesterday, having been up 150 points during the day. Nasdaq was down two per cent. In the US, it looked as though investors were looking for weaknesses in technology stocks, and selling if they imagined there were any: it was a day for fair-weather friends. It was turnaround time for Motorola following Monday's after hours result: its shares rose eight per cent, and pulled up deadly rival Nokia two per cent. Keane, a millennium bug killer, rose nine per cent. Lucent acquired the privately held Quadritek for around $50 million, and fell two per cent. AOL fell five per cent after the news that CTO Michael Connors was leaving. Lycos rose six per cent after it announced it was buying Wired Digital. Cisco, Dell and Microsoft fell four per cent. Citrix fell at one point yesterday by 22 per cent, but closed down 11 per cent on concern at Microsoft's pricing for NT Terminal Server, which uses Citrix technology. Intel was down four per cent [other reports say one per cent]. Oracle was down nine per cent, and Sun down eight per cent. Veritas was harshly treated by investors following the announcement of its Seagate Software acquisition (see Seagate storage management arm to merge with Veritas), free-falling 42 per cent on shareholder concern that Veritas was paying too much. The 33 million shares now make the deal worth only $862 million after yesterday's close, rather than the original $1.6 billion. Many investors were hoping that the deal would fail, but both Veritas and Seagate say they are pressing on. This is not the first time that Veritas' share price has dropped following an acquisition: when it acquired OpenVision last year, the shares fell sharply, only to increase three-fold. There was no provision in this deal for it to be called off if the share price dropped, but there is a hefty fee to be paid if either side were to walk away. In a crafty move, Veritas cleared the deal on a hypothetical basis with the SEC. Apparently, Veritas had planned to call $500 to $550 million R&D and amortise the remaining billion or so at about $80 million/quarter. A potential problem is an unusual trading pattern last Friday, before the announcement, suggesting the possibility of insider dealing: some 3.8 million shares were sold, to make it the second heaviest day's trading in the company's history, with a four per cent drop in Veritas' share price. The prospect of increased competition from Veritas sent Legato down 22 per cent. Against expectations, AMD was restored to profit (just) in its Q3, helped by sales of its K6-2 processors -- sales of the K6 family were 3.8 million units, or 54 per cent of the sub-$1,000 PCs sold in the US. The revenue was $686 million, and the profit $1 million, a 15 per cent year-on-year increase in revenue, and a 30 per cent increase on Q2. The shares rose 7 per cent. Meanwhile, AMD plans to show the K7 at Comdex in November, and launch it early next year. ® Click for more stories